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Friday, April 12, 2024

Social Safety Claiming: The Case of Two Marriages, Two Divorces


That is the most recent in a sequence of biweekly articles that includes Social Safety claiming case research drawn from the ALM publication “2024 Social Safety & Medicare Details,” by Michael Thomas with assist from Jim Blair, a former Social Safety administrator, and Marc Kiner, a planning knowledgeable with in depth expertise in public accounting.

The Situation: Two 10-Yr-Plus Marriages and Two Divorces

Sherry, who doesn’t have sufficient credit to be eligible for Social Safety advantages based mostly on her personal work report, was married to Charles and Shaun for over 10 years every, and he or she has been divorced for over two years from every.

Whatever the submitting standing of her ex-spouses, as soon as they and Sherry are not less than age 62, Sherry can file for ex-spousal advantages as an independently entitled divorced partner. She is eligible first on her first husband’s report and later eligible on her second husband’s report.

Because of deemed submitting guidelines, if Sherry takes advantages from Charles’ report earlier than changing into eligible for advantages on Shaun’s report, she should file on Shaun’s report in her first month of eligibility — June 2024, on this situation.

Primarily based on their ages and life expectations, Sherry is predicted to survive Charles. Thus, her survivor profit projections are based mostly on Charles’ work report. Statistically, Sherry isn’t anticipated to survive Shaun, but when she does she can be eligible for a survivor profit based mostly on his work report.

Sherry was born in Could 1962, which means she has a full retirement age of 67 and an anticipated demise age of 87. Charles was born in November 1960, and he has a full retirement age of 67, at which era he can be eligible for $1,875 in month-to-month funds. Charles’ anticipated demise age is 84. Shaun was born in Could 1967, and he has a full retirement age of 67, at which era he can be entitled to a month-to-month advantage of $2,250. His anticipated demise age is 85.

What the Numbers Say

Whereas this set of enter assumptions appears extra advanced than many different potential claiming methods for a single filer, the reality is that there are simply two main claiming methods for Sherry to contemplate. The projected distinction in lifetime profit worth between them is comparatively modest — about $35,000.

The suboptimal technique would see Sherry file what is named an “independently entitled divorced partner software” in Could 2029, at which era she can be 67 and subsequently entitled to 100% of her spousal profit ($1,125) based mostly on her marriage to Shaun. She would later develop into entitled to a $1,875 month-to-month survivor profit based mostly on Charles’ employee profit. This method would ship a projected lifetime profit worth of $311,250.

The higher technique is considerably extra advanced, however as famous, it delivers about $35,000 in further projected advantages. On this case, Sherry information in June 2024 at age 62 for an independently entitled divorced partner software, at which era she’s going to develop into entitled to a decreased spousal profit based mostly on Charles’ earnings of $613.

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